Welfare-State Remedy to Globalization and Aging Forces

Assaf Razin and Efraim Sadka

No 24754, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Globalization, in the form of financial flows, which is always advantageous on an aggregative level, typically creates winners and losers, if left exclusively to market forces. The paper demonstrates that typical welfare-state redistribution policies, governed by a majority of the population, spreads the globalization’s gains from trade to all income groups, even those who are low skilled and have small capital endowments. Therefore, financial globalization of a welfare-state economy generates a Pareto improvement.

JEL-codes: E44 E62 F21 F6 H0 (search for similar items in EconPapers)
Date: 2018-06
New Economics Papers: this item is included in nep-mac
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